The latest problems with Intel's 820 chip set may cost the company hundreds of millions of dollars to fix, but could be a boon to the PC owners in line for replacement parts.

Intel announced Wednesday it will replace motherboards that use its 820 chip set, a defective memory translator hub (MTH), and synchronous dynamic random access memory (SDRAM). The replacement is another 820-based motherboard using Rambus memory (RDRAM), newer technology that's more costly than SDRAM. Consumers who own such a system must contact their PC vendors to participate.

Aside from the hassle involved, the scenario looks pretty good for people with these 820-based systems, says Kevin Krewell, analyst with MicroDesign Resources. Essentially they're in line for a free upgrade from SDRAM to the arguably faster and definitely more expensive RDRAM.

Intel declines to comment on whether it will replace SDRAM with the same amount of RDRAM, or whether customers who added extra SDRAM to their PC can expect additional RDRAM, too.

Regardless of how much RDRAM Intel springs for, though, the memory is going to be the most expensive part of this solution, Krewell says.

Replacing the chip set and motherboard may cost less than $100, he says, but the RDRAM will cost much more. (A quick price check shows a 128MB RIMM of 800-MHz RDRAM selling for about $600.)

It's hard to estimate the cost to Intel. Company spokesperson Dan Francisco estimates it shipped "less than a million" motherboards with the potentially defective MTH.

While not every owner will come forward for replacement parts, the cost will still likely be in the hundreds of millions of dollars, Krewell says.

Intel is preparing a chip set called the 815 that supports SDRAM without an MTH. Waiting for that solution might have saved the company money without costing consumers performance, Krewell says.

That's true, but since the 815 is not yet shipping, it was not an option, Francisco says. Intel has said the 815 will ship in the second quarter. But Intel hopes to take care of this problem as quickly as possible, he says.

The Problem

Intel designed the 820 chip set to use RDRAM, but later added the MTH option to allow for motherboards that work with the less-expensive SDRAM. The MTH translates signals from SDRAM to the 820 chip set.

Since the defective component began shipping only in November last year, Intel says systems shipped before that time are unaffected by the problem. Systems featuring Rambus DRAM are not affected since they don't use the defective MTH, Intel says.

System noise resulting from the memory translator hub can cause PCs to intermittently reset, reboot, and/or hang. Intel says it has also been able to cause data corruption under synthetic stress testing in its laboratories.

The replacement call comes after Intel in February admitted that there may be a problem with the memory hubs in some of its 820- and 840-based motherboards.

Users who want to know whether their system uses the faulty component can contact their computer maker for more information or can visit Intel's Web site to download the MTH ID utility (see link at right).